If Atlantic Yards shrinks, the public will pay more.
Forest City Ratner brass said this week they plan to tweak the mammoth $4.2-billion mega-development by eliminating a few hundred luxury apartments and reducing the height of the 620-foot “Miss Brooklyn” tower — but the cost will be additional public subsidies for the 2,250 units of below-market-rate rentals that Ratner’s promised to include in the plan.
Real-estate executives were not surprised.
“If a part of their profit is gone [by eliminating some of the project], they have to come up with a way to make the income back,” said Real Estate Board of New York President Steven Spinola. “Public subsidy is a way to do that.”
Estimates of public subsidies likely to flow Ratner’s way remain in the billion-dollar-or-so range, yet city and state officials have consistently claimed that the public payoff to Ratner is small compared to the project’s overall benefit.
Developer Bruce Ratner has said that Atlantic Yards must be big in order to cover his costs of renovating the MTA rail yards at Flatbush and Atlantic Avenues, building a platform over them, and providing the 2,250 below-market rentals.
The reported trim — a six- to eight-percent reduction in overall size — will return the project to the 8-million-square-foot specs of the original plan introduced by Ratner in Dec., 2003.
But since that star-studded Borough Hall presentation, the estimated cost of Atlantic Yards has soared from just over $2 billion to $4.2 billion. And critics said that Ratner was trying to balance his still-unreleased numbers on the backs of New York State taxpayers.
“It’s typical of Forest City Ratner to inflate projections in order to get more public money from of the state,” said Evan Thies, spokesman for City Councilman David Yassky (D-Brooklyn Heights).
“It’s a deceitful way of doing business, and they should be committed to a project that works and can be vetted to the community.”
Yassky doesn’t support giving the developer any additional subsidies for affordable housing, Thies told The Brooklyn Papers. He has called for the project to be halted unless its traffic, transit, noise, shadow and other adverse impacts are not properly mitigated.
Critics say the reported trim not only requires more money from taxpayers but ignores the larger criticism that Ratner’s plan would transform a quiet section of Prospect Heights into a shiny hub of 16 Frank Gehry-designed towers and the country’s most-expensive arena ever.
(Then again, there may not be a trim at all: The New York Observer reported Wednesday night that Ratner met with the City Planning Commission on the same day the Times story broke, yet the topic of a scaleback did not come up.)
If Ratner cuts back on the number of market-rate apartments, some worry that the developer would also cut the number of affordable units, currently pegged at 2,250.
Since the news of the slight trim trickled out, even project supporters like Assemblyman Roger Green (D-Prospect Heights) have called for a guarantee that the number of affordable units will stay the same regardless of the number of market-rate units or their profitability.
Green supports a bill introduced last spring by Assemblyman Jim Brennan (D-Park Slope) that would deliver hundreds of millions of state dollars to Ratner — $462 million over 30-years in affordable-housing subsidies and a $68 million green energy credit — in exchange for a 34-percent reduction in density. The Brennan bill would also free Ratner of the $100 million he’s commited to paying the MTA, a state agency, for the Atlantic Yards site.
If the bill became law, Brennan estimates that each affordable unit — available to families earning between $21,270 and $113,440 in today’s dollars — would cost the government about $235,000.
“Without [the subsidies], if there is an economic downturn in the next 10 years, the affordable units will be threatened,” said Brennan spokesman, John Keefe.
Right now, the only legal document that binds Ratner to building all 2,250 affordable units is the “Community Benefits Agreement” — but the developer can back out simply by paying $500,000 to the organizations that signed the deal.
FCR spokespeople did not respond to questions from The Brooklyn Papers.
